Understanding The Importance of Homeowners Insurance

home insurance

If you’re like me, you have a home (or maybe multiple homes) that you purchased and customized to exactly your preferences.

It was the easy decision to make because why pay so much money for rent when you can have something that you totally own for possibly even half of the cost?

You spent time looking at many houses, picked out the right one, then you painted the walls, decorated it, changed the landscape, and completely made it your own.

Well, what if I were to tell you that suddenly tomorrow the entire thing gets destroyed in a flood, gas explosion, or even a truck runs off the road and drives right into your house?

What then?

These scenarios are exactly what most homeowners don’t think about when they buy a house, but then it comes back to bite them in the ass when disaster does occur.

That’s why I’m here to tell you how important insurance is to your home and why you shouldn’t fall into the “insurance is a scam” trap.

Insurance can save the day when you least expect it

Consider this:

When we’re buying insurance for anything, whether it’s for your health, car, phone, or house, we aren’t buying it so that we can get frequent check ups or for maintenance.

Insurance is primarily for catastrophic events.

Your health insurance isn’t for reduces co-pays, it’s for when you get hit by a car, suffer a heart attack, or suddenly get diagnosed with some terrible disease that the hospitals love charging hundreds of thousands of dollars for.

Would you pay a few hundred a month so that the several hundred thousand dollar bill would get covered?

Well if you just purchased a home for $200,000 and something catastrophic happens, would that be worth paying $700 a year?

That’s where insurance comes in for your home.

Now, it’s also important to realize what home insurance won’t cover.

It’s great to have, but there are other types of insurances needed for some of the issues your home might run into.

One more important fact is to learn that there are many different insurance companies — some are better than others.

When people don’t do their research, that’s when they find that they get ‘scam’ insurance.

Some basic research can help reveal the best insurances available.

Protect your investment with homeowners insurance

Here’s what happens:

When something happens to a house, homeowners insurance covers the structure up to a certain dollar amount.

Generally that dollar amount is going to be equivalent to the value of the home, unless it’s in an area where the value is actually primarily lot value, like downtown.

The value of the building itself will be less than the lot, so the insurance coverage will primarily cover the building.

That means if something catastrophic happens, the insurance company will payout the what you need to either repair or rebuild the home entirely.

For many, this is something that would have saved them a LOT of money as well as stress.

Every year hundreds of thousands of homes are lost due to different circumstances and the homeowners have lost the use of that house.

If these houses were not covered, then they would have a property that is uninhabitable and they are still responsible for the loan on it.

With coverage, they can either pay off the mortgage and get out from under it or they would be able to at least rebuild the property so that they can maintain their lifestyle there.

Don’t forget about home warranty

In some areas, when summer comes around, the a/c never fails to, well, fail.

That’s where home warranty comes in.

Home warranty will cover appliances in the home that eventually breakdown.

This includes air conditioners, heaters, water heaters, dishwashers, stove/ranges, and so on.

When these appliances inevitable break down, you either have to pay the amounts out of pocket or you carry a home warranty from around $50-70 per month that will send someone out there to repair or replace the appliance for you.

This is especially important for air conditioning units.

HVAC systems can cost anywhere from $2000-6000 to repair or replace.

That’s not something that you want to suddenly deal with if you don’t have an extra savings account or planned maintenance budget.

Home warranties can save your ass in cases like that, and believe me, you don’t want to be stuck without an a/c during the summer in some place like Houston.

Protect your home’s value

When it comes to maintaining the value of your home, you definitely want to make sure that everything is as it should be.

When certain parts of your home degrade, so does the value of the property.

By keeping your home covered, you ensure that the value of the home remains up to market value because anything that would damage the home enough to drop its value would be covered by insurance and warranty.

An additional benefit is that when a buyer comes to check out your home, they will see that you kept it in good shape because you took the extra steps to cover its integrity.

This will most certainly come in handy when it comes to selling your home.

Keep your home covered, and your family will stay happy and safe

The last thing any homeowner wants to do is put their family at risk.

That’s what you’re doing when you don’t have backup plans for your home.

When something goes wrong and your family no longer has a roof over their heads, it’s on you for not having them covered from the beginning.

Don’t let that happen.

Take care of your family and take care of your home, something that you’ve paid a steep price for.

You want to protect your asset.

Understanding the importance of home insurance is one of the best things you can do when it comes to preserving your assets.

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